What Is a Fraudulent Conveyance?

Video Transcript

"You're involved in a bankruptcy, and you've heard the term 'fraudulent conveyance', and you ask yourself "What is a fraudulent conveyance?" My name is Andy Forman. I'm a consumer and business bankruptcy in Tampa, Florida, and I deal with these issues. A fraudulent conveyance or fraudulent transfer as it's also called, is a transfer by the debtor to a third party for less than reasonably equivalent value, or substantially less than fair market value. It doesn't really or typically involve fraud, as you've heard it used in street parlance. It's just a transfer from the debtor to a third party, where the debtor gives away something of a certain value and receives significantly less in return. The courts have the ability to recover the property or the funds that were fraudulently transfered to help recover these assets for the benefit of creditors. Essentially what happens is when the court determines a fraudulent transfer has occurred, they initiate litigation against the transferee, the recipient of the fraudulent transfer, and seek to recover it. Or in the alternative, money damages in an amount equal to what was transferred out. You'll need to get competent legal counsel to investigate this further. My name is Andy Forman. Good luck with your bankruptcy."